Thought experiment: I inherit a nice chunk of change and want to live life in Manhattan without needing to work, just cruising the museums and experiencing the culture.
What kind of income would I have to be deriving from my investments to make a simple existence on some of the hottest real estate in the world.
Assumptions: Very basic quarters, like a small studio with minimal but practical kitchen and bathroom functionality, say 400-500 square feet. Not picky about neighborhood just not open warfare on the street and only a couple obvious drug dealers or streetwalkers.
Not going to be living it up just wanting to go out to a nice dinner with a friend once every week or two, get around town via bus and subway, and generally not going to be worried about starving or ending up homeless.
I lived in such a studio on 23rd St., between 7th and 8th Ave. for 7 years in the 90s. I was working, but earning only about $35-45k at the time. My rent was $625/month which is really, really cheap for Manhattan. Even if you doubled the rent, Rigamarole’s 100k is probably pretty close if you’re frugal. The good thing is that much of the culture can be had for free or close to it. The bad thing is that almost everything else is very expensive.
Assuming $2000 rent, you’ll need 24K/yr to cover that. Some utilities (usually heat and gas) are usually included in rent so figure another 5k/yr to cover, water, electricity, cell phone, cable and internet (roughly $400/mo) altogether.
You wont need a car, so no insurance payment or gas, but you will need a Metrocard, $1100/year.
Add in $20k for food and entertainment for the year ($53 daily allowance), I think you’d live a spartan-in-some-ways but quite enjoyable life at 50K/yr.
It doesn’t go anywhere. People seem to to think “living in Manhattan” is equivalent to renting a penthouse on CPW for everybody.
There are 1.6 million people living on that island. Do they all make $100k a year? Not even close. There are neighborhoods where real-estate is the height of insanity, and there are more reasonable places, like Washington Heights, Inwood, Alphabet City, the far west Village, and Harlem which have far more reasonable rents. Of course, “reasonable” by Manhattan standards is still quite pricey by rest-of-the-country standards, but is quite doable on $50k a year.
My first apartment in the City was in Queens, not Manhattan, but I was paying $900 a month on $36,000 per year. That didn’t leave a lot of room for error, but still worked out fine.
Here’s a bunch of Manhattan apartments at around $1000/month. Now these are mostly in northernmost Manhattan, in Washington and Hamilton Heights and Inwood. While these are not the best of neighborhoods, they are gentrifying, and should fall within the OP’s parameters.
If you’re going to do that, why not just be a complete badass and live in the Bronx? After all, 1.4 million people already do, and it’s got to be a lot cheaper.
Absolutely agree. I was born and grew up in the Bronx. You’re not that much further from the museums etc by subway than you would be living in most “affordable” neighborhoods in Manhattan.
There are a lot of really great neighborhoods in the Bronx. Only a few relatively small parts are notoriously crime-ridden, and they are a lot less crime-ridden than they used to be.
Well, without going into great detail about my personal finances, I live about like the OP suggests, and it looks as if I manage to shell out about $10k a year aside from my rent. So, if I were living in a $1000/month studio, I could get by on $22k after taxes. Luckily I’ve got a bit more overhead than that, but I’m still way below the $100k mark.
Of course, it helps that I don’t drive a car or pay for auto insurance, don’t have any other mouths to feed (babies, girlfriends, or otherwise), and don’t eat at fancy restaurants. I don’t go to the gym; I run in Central Park instead. No need for cable, or even a TV; I have a nice big monitor that I can see from every corner of my room, and a computer with an HD tuner. Anything I can’t get with rabbit ears I can download or watch on Hulu.
I don’t consider myself willfully frugal; it just turns out that way, and the simplicity of living in NY actually helps with that. Actually, a shockingly large portion of the $10k I spend each year is feeding my weakness for the latest and greatest gadgets.
I was looking in Manhattan and around $2,000 will get you a small 1 bedroom or a decent studio. Transportation is cheap, a metro pass. When I was there the cost of food and basic items was similar to Chicago, some was even cheaper. The biggest issue is the housing in Manhattan, lower than the top of Central Park is the housing is old, and much of it is shoddy quality. But at $2,000/month you’re looking at a decent place.
The neat thing about Manhattan is they have a lot of little clubs and they have great entertaiment for free. So you can get by in other ways.
When you start getting into family and cars and such you really have issues. Also many cheaper flats than $2,000/month, you start to run into a lot of “fees” like “cash key deposits” (San Fran is another good one for that). Which is basically a once a year CASH of $5,000 or something like that for the KEY to your place. It’s a bribe but that goes away around the $2,000/month mark.
In some places NY TV is very hard to get, due to the buildings, and I was there it was analog so I imagine digital is harder. I live in Chicago now and the tall buildings kill digital. So you may need basic cable.
Using the old one month’s rent should equal one weeks’ gross pay, you’d do nicely in Manhattan at $104,000.00
Using 35% of your gross pay, which is the max they say you should use, you’d need about 68,580 a year.
If you look for a flat under $2,000/month it’s do-able but it’ll take awhile and it might come with hidden fees or other things you wouldn’t want.
I guess I’m an old fart, because I remember when having cable TV wasn’t considered ‘frugal’ or spartan. (And cell phones were some kind of crazy Gordon Gecko-esque extravagance.)
Not any more. Those are two of the most fashionable neighborhoods in Manhattan. Old housing is being torn down and replaced with high-end buildings at a blindingly fast pace (or it was, until the current economic crisis).
I took a walk through Alphabet City the other day and barely recognized my old neighborhood. Avenue D was more or less unchanged, but that’s because there is public housing there, which is more or less immune to market forces.
